"Ray Dalio warned that rising U.S. debt and deepening political divisions could push the country toward crisis. In an interview this week, the Bridgewater founder said America faces a choice between uniting around shared interests or descending into destructive conflict. He cautioned that the nation's 125% debt-to-GDP ratio risks triggering a "debt bomb" if investors lose confidence, forcing higher borrowing costs or painful spending cuts."
"Should friction in the U.S. continue, the hedge fund founder warned individuals' ability to "hurt each other" has never been higher. He explained: "We're in wars. There is a financial, money war. There's a technology war, there's geopolitical wars, and there are more military wars. And so we have a civil war of some sort which is developing in the U.S. and elsewhere, where there are irreconcilable differences.""
"Speaking to Bloomberg, Dalio said there are two outcomes for America: Either the nation pulls together and rises above, or conflicting sides exert as much pain on the other as they can. Society may "rise above it and realize that our common good is going to necessitate us dealing with it so that what works for most people is going to work." Unfortunately, this belief may prove "a little bit idealistic.""
Rising U.S. debt at about 125% of GDP combined with deepening political divisions increases the risk that investor confidence could collapse, producing a "debt bomb" that forces higher borrowing costs or painful spending cuts. Multiple overlapping conflicts exist across financial, technology, geopolitical, and military arenas, alongside an emerging domestic civil conflict marked by irreconcilable differences and heightened capacity for mutual harm. Two stark outcomes are possible: national unity that advances the common good, or escalating power struggles in which opposing sides inflict maximum pain. A Gallup survey found 80% of Americans perceive the nation as greatly divided.
Read at Fortune
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